Justificación histórica del Consejo General del Poder Judicial

1. D

,

ANDTHE PLANNED

SDG

Development is not merely a matter of economic growth. And LDCs are not merely smaller versions of developed economies; they are structurally different. Therefore, their development, especially in the early stages, involves not only increasing the scale of their economies, but also the latter’s structural transformation, like the metamorphosis of a caterpillar into a butterfly. As countries develop, their economies become larger, but also different in nature. Thus the process of economic development is intertwined with economic structural change and transformation (ECLAC, 2008; McMillan and Rodrik, 2011; Lin, 2012).

Productivity is central to this process. Increasing labour productivity is essential to long-run economic growth, and, combined with a rise in employment, it allows real labour incomes to rise. Unless output per worker increases, the only way of keeping domestic prices under control and maintaining competitiveness is by compressing real wages, but this would hamper poverty reduction. Higher productivity, on the other hand, allows wages to increase, thereby fostering more inclusive growth, contributing to human development and poverty reduction, and keeping inequality in check.

Different productive sectors and activities have very different levels of productivity, along with varying potential for innovation, employment creation, Chart 22. Completing the circle: A framework for the SDGs

Nutrition, health and education programmes; income support Conducive external environment Economic development/ structural transformation Increased productive potential Productive and remunerative employment Fiscal resources Improved nutrition, health, education Poverty reduction

SDGs

MDGs

Source: UNCTAD secretariat.

Development is not merely a matter of economic growth.

LDCs development involves not only increasing the scale of their economies, but also the latter’s

structural transformation.

Productivity is central to this process.

economies of scale, etc. Thus the balance between sectors, and between activities within sectors, has important implications for long-term growth potential. In the earliest stages of development, countries are dominated by “traditional” sectors, notably small-scale family agriculture and informal services. These are generally refuge sectors to which people resort in the absence of other income sources. They tend to have substantial surplus labour and very low productivity, and consequently generate limited income. Moreover, their potential for innovation and economies of scale is generally limited.

Historically, structural transformation has been understood as the transfer of labour (and capital) from the traditional sectors to the modern sectors of the economy. It thus entails different growth rates in different sectors, as productive resources are moved from sectors with lower productivity to those with higher productivity (chapter 4 of this Report). The main emphasis has been on a shift from agriculture towards manufacturing, which has been seen as offering the greatest potential for increasing returns and technological innovation.1

However, the divisions between broadly defined sectors (agriculture, extractive industries, manufacturing and services) mask enormous differences within each sector — from small subsistence farms to plantations, from artisanal mining to oil rigs, from a person with a sewing machine to a textile factory, from a street seller to a software consultant. Thus, differences in productivity within each broad sector may be as great as those between sectors.

More recently, therefore, the understanding of structural transformation has been extended to include not only shifts between sectors, but also within sectors, towards activities which are more knowledge-intensive or have higher value added or greater learning potential. Thus structural change may be defined as the ability of an economy to continually generate new dynamic activities, characterized by higher productivity and increasing returns to scale (Ocampo, 2005; UN/DESA, 2006; Ocampo and Vos, 2008). Interpreted in this way, structural transformation may be seen as a counterpart at the macro level to the (generally micro-level) concept of innovation; that is, as the introduction of, for example, new products, processes, organizational methods, inputs and markets, which are either new to the world or (in a narrower sense) new to a particular firm or country (UNCTAD, 2007). In LDCs, innovation and structural transformation generally occur mainly in the broader sense: they represent a movement towards the global technology frontier rather than moving the frontier itself.

In this Report, structural transformation is thus defined as including:

• Increasing labour productivity within sectors through technological change, investment (increasing the capital used per worker) and innovation (including the development of new products); and

• Additional improvement in aggregate productivity at the national level, as productive resources (including labour) are shifted from less to more productive activities or sectors.

This process of structural transformation is critical to converting the vicious circle of underdevelopment (as shown in chart 20) into a virtuous circle of accelerated economic and human development (as shown in chart 22). But this does not happen naturally or automatically; it requires a deliberate policy effort and a conducive international environment. As discussed in chapter 4 of this Report, few LDCs have undergone any significant economic transformation since 1990, and it is this failure which underlies their generally weak performance in achieving the MDGs.

Different productive sectors and activities have very different levels of

productivity.

The balance between sectors, and between activities within sectors, has important implications for long-

term growth potential.

The process of structural transformation is critical to converting the vicious circle of underdevelopment into a virtuous circle of accelerated economic and

2. D

“

”

Economic transformation is critically important in the context of the planned SDGs, not only because it is more likely to help ensure that the goals will be achieved, but also because it will enable the progress made to be sustainable beyond the target date of 2030. Without a solid economic foundation, progress in human development risks ultimately being reversed: without viable livelihoods, poverty will rise again, worsening nutrition and health, and without a firm economic source of public finances, health services and education will deteriorate once external support begins to wane.

This is part of a larger issue, namely the meaning of “sustainable” development. The concept of sustainability is central to the SDGs and the post-2015 development agenda. In practice, however, this has generally been interpreted to refer to environmental sustainability, particularly in relation to climate change. However, while environmental sustainability is undoubtedly important, it is only one of several factors which may prevent development from being sustained. Equally, if not more, important are the economic, financial, political and social dimensions of sustainability. Failure to take account of these dimensions could result in a reversal of progress, and in failure to meet the SDGs over the long term. From an LDC perspective, the key issue is whether development and progress towards the SDGs can be sustained; what prevents them from being sustained is a secondary consideration.

Completing the circle of economic and human development, as discussed above, may be seen as the economic dimension of sustainability. Given the magnitude of poverty in LDCs, eradicating it through income transfers alone will be impossible: the financial, administrative and logistical challenges would be formidable. And, in the absence of development, such transfers would need to be continued indefinitely, and on a very large scale, to prevent a return of extreme poverty. Poverty would not be eradicated, but only alleviated for as long as transfers could be sustained. Thus poverty can only be eradicated by increasing the primary incomes (from employment and self-employment) of those now in poverty sufficiently to reduce the transfers needed to a feasible level. This means increasing employment, wages and incomes.

Equally, the major investments in other areas, such as education, health and water supply, that would be necessary to meet the planned SDGs in these areas will give rise to substantial recurrent costs, such as for teachers’ and health professionals’ salaries, drugs and other medical supplies, and maintenance. Cost recovery would by definition be zero for primary and secondary education (since the SDGs, as currently envisaged, specify that these should be free), and at most limited in the areas of health services, water and sanitation, given the need for accessibility and limited purchasing power. The potential for cost recovery for maintenance of other infrastructure is also likely to be limited by low income levels. Financing these costs sustainably will require a considerable increase in public sector revenues.

Social and political sustainability is also critical, particularly in the early stages of development. Economic transformation, and especially the emergence of a “modern” sector, benefits some segments of the population more than others. Where it is based on the development of manufacturing, in particular, it tends to benefit urban areas and populations disproportionately. Those who have capital to invest, or the human capital required to take higher paying jobs in the emerging “modern” sector would benefit the most, whereas unskilled workers left in the traditional sectors would benefit the least. This may increase inequality and widen rural-urban, regional and/or inter-ethnic disparities. While failure to achieve economic and human development carries its own risks, attention to such effects and the development of mechanisms to manage them successfully are essential to ensure the political sustainability of development.

Without a solid economic foundation, progress in human

development risks ultimately being reversed.

The economic, financial, political and social dimensions of sustainability should be central to the SDGs and the post-2015

development agenda.

Poverty can only be eradicated by increasing primary income. This

means increasing employment, wages and incomes.

Social and political sustainability is critical, particularly in the early

Environmental sustainability is also critically important. However, there is a major distinction between local environmental issues and global issues such as climate change. While the former need to be addressed by national governments, balancing their own short- and long-term interests, the primary consideration concerning the latter is how global responses will affect the economic environment for development. This is particularly important in the case of climate change (box 3). Reconciling development paths with such global

Box 3. Climate change, global carbon constraints and poverty eradication: Implications for post-2015 development A key goal and long-standing commitment of the international community is to limit global warming to less than 2°C above pre- industrial levels, but was not included explicitly in the Open Working Group’s final proposal for the SDGs.a _{That climate change goal} implies a very considerable reduction in global emissions of carbon dioxide and other greenhouse gases. Only one of the four emissions scenarios envisaged by the Intergovernmental Panel on Climate Change is consistent with this objective (IPCC, 2013).b _{Depending on} the Earth System Model used, this requires a global emissions reduction of between 14 per cent and 96 per cent from the 1990 level globally (45−97.5 per cent from the 2011 level).

Traditional environmental issues such as land, water and air pollution, (and biodiversity and deforestation to a large extent) are local issues. Pollution affects those in the vicinity of its source. These effects may spill across national borders, but they are geographically defined in relation to the source. For local environmental issues, the key question is how individual countries can best deal with them, balancing the need for long-term environmental sustainability with the more immediate need for economic development and improved living standards.

In the case of anthropogenic climate change, however, it is total global emissions of greenhouse gases which have an impact on

the global climate. The effect of each country’s greenhouse gas emissions and carbon footprint on its own climate is negligible. This

is why global action is so critical, but also why it has proved to be so problematic. Each country bears the economic cost of its own emission reductions, but benefits mainly from the emission reductions of others. Thus, climate change, by virtue of its global nature, can only be dealt with by the global community as a whole.

The key issue for LDCs concerns the potential effects of this global response on their development. Without effective global action to tackle climate change, extreme weather events and rising sea levels will unquestionably undermine any progress towards poverty eradication. Nowhere is this more important than in LDCs, given their greater exposure and vulnerability, and their more limited adaptive capacity (IPCC, 2013). Low-lying countries such as Bangladesh, the Gambia and Tuvalu face the threat of inundation and storm surges, which could displace substantial segments of their population. The frequency, severity and duration of droughts are likely to increase. In addition, agriculture — a critically important income source in most LDCs — will be increasingly affected by “season failure” arising from greater variability of rainfall between and within seasons (AGRA, 2014).

There is widespread recognition that LDCs’ own carbon emissions should not be subject to limitations which would impede their development. However, global action to reduce carbon emissions may be expected to have significant effects on global markets and consumption patterns in major export markets, with potentially important implications for LDCs’ export opportunities. Assuming that global action is taken on climate change, it will be important to ensure that development strategies take full account of such secondary effects. Most obviously and directly, global carbon emission constraints imply a limit to fossil fuel exports. However, some goods and services which have been important for export diversification in some LDCs may also be affected, notably long-haul tourism (of particular importance to island LDCs, but also, for example, to the Gambia and Cambodia) and perishable horticultural products that need to be transported by air (e.g. soft fruits and vegetables, and cut flowers).

Sustainable consumption and energy efficiency goals could also potentially affect the upgrading of manufactured exports (particularly of durable goods) as development progresses. Efforts to increase energy efficiency have already led to greater sophistication and complexity of goods such as cars and washing machines in developed-country markets. Moreover, efforts towards more sustainable consumption could imply an increased concern with product life and a shift towards higher quality consumer durables, as well as an acceleration of this trend. Similarly, improved environmental standards for production are likely to raise production costs and the technology-intensity — and possibly the capital-intensity — of industrial production, effectively raising barriers to new entrants to these industries.

More generally, given the close link between global GDP and greenhouse gas emissions, emission reductions on the scale indicated above implies some limit to the potential rate of global economic growth. It may be possible to achieve the 2°C warming target with a growth rate comparable to that achieved in the period prior to the current financial crisis (around 3 per cent per year), but it seems unlikely that it would be compatible with a major growth acceleration.

As discussed in section C.2 of this chapter, however, the income growth rate of the poorest households is considerably greater the above-mentioned rate. Thus, meeting the poverty eradication target while simultaneously fulfilling global goals on climate change will require the incomes of the poorest to grow much faster than the global economy; that is, it will require a considerable shift in the distribution of the additional income generated by global economic growth in favour of the poorest, whose incomes have grown much more slowly than the global growth rate in recent decades (Woodward and Simms, 2006; Milanovic, 2012). This is also consistent with a widespread concern in discussions on the post-2015 agenda (though not on the SDGs themselves, as envisaged at the time of writing) with reducing inequality, globally as well as nationally.

a _{The Report of the High-Level Panel on the Millennium Development Goals “underlined the importance of holding the increase in global}

average temperatures below 2 degrees Centigrade above preindustrial levels”, and cited as one of the global impacts of its proposed goals, “Average global temperatures on a path to stabilize at less than 2° C above pre-industrial levels” (United Nations, 2013:19, 55); and drafts of the outcome document of the Open Working Group (OWG) until June 2014 included as target 13.1 to “hold the increase in global average temperature below a x°C rise in accordance with international agreements” (OWG, 2014a). However, the OWG outcome document published in July (OWG, 2014b), while strengthening the goal itself and linking it explicitly to global negotiations under the United Nations Framework Convention on Climate Change, omitted this target.

b _{This scenario limits the temperature rise to 1.6°C, with an upper confidence interval of 2.3°C.}

Environmental sustainability is also critically important.

environmental concerns will be critical. Thus an important element for achieving the planned SDGs will be to find “win-win” options that will benefit development and environmental sustainability, and, more particularly, poverty reduction and climate stabilization.